Author: John Leonard, General Manager ERP/EPM, Oracle
Digitalisation is transforming organisations – be it in operations, marketing, sales, finance or human resources; and procurement is no exception. Commonly seen as a back-office function and often the last to receive investment from the business, the future of the Chief Procurement Officer (CPO) will likely change. The reality is, if CPOs don’t start elevating themselves to the boardroom as strategic advisors who will enable better performance across the board, their replacements will. Faced with this inherent pressure, CPOs know they need to innovate but don’t always know how. Here’s how CPOs can modernise their working environment in order to help future proof their position:
Advocates for automation
Procurement is often one of the last business functions to be digitalised and automated – even though the benefits of doing so are obvious. The PASA Procurement Transformation Report 2018, sponsored by Oracle reveals that only 25 percent of Australian and New Zealand companies surveyed are using fully automated Purchasing to Payments (P2P) systems, even though 65 percent of those who haven’t fully adopted automation would be interested to do so. In other words, automation’s promises of improved efficiency and greater innovation have yet to become a standard practice for most organisations.
Leaders in Procurement best practices
Today’s CPOs can spearhead digital adoption within their businesses and help drive operational efficiencies through the insights available to them. Traditionally, digitalisation within an organisation begins with front-office customer-facing applications like sales and marketing, leaving back-office functions such as procurement and even supply chain for a later stage. However, there is a great opportunity for CPOs to act and present to the executive team how digitalisation can not only streamline the procurement process and drive efficiencies, but also provide operational insights into the greater supply chain.
Data analytics power-users
Digital technologies like machine learning and artificial intelligence are empowering CPOs like never before. These technologies can reveal patterns and trends which help CPOs to buy better quality products at better prices at the right time. Information has always been at the heart of the CPOs’ role, and larger amounts of data mean greater visibility into spend, inventory, and compliance than ever before – highlighting the added value that procurement can provide to the wider business.
Analytics gives CPOs more than just improved reporting accuracy. Being able to view purchasing patterns, supply availability, cost structures, lead times, and risk metrics in real time also establishes procurement as the source of critical business intelligence.
For many organisations today, a manual procurement process is no longer able to satisfy and meet the requirements of a dynamic and changing business. With greater digital awareness and cloud-based innovation like automation, machine learning and data analytics, CPOs can establish themselves as more than just efficient resource managers and cost savers, but also strategic advisers to their line-of-business counterparts and the board. Procurement sits at the intersection of supply and demand within any business. The right digital tools and skill set can help CPOs take command of the traffic that passes by them – ultimately resulting in better-resourced business units and smoother operations for everyone.
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